Biden’s Team Hopes to Downplay Inflation Ahead of Data Release
ZFX – President Joe Biden is trying to reassure Americans that rising costs of energy and other major goods are starting to subside but that change may not be reflected in the November data due later in the New York session later in the day.
The consumer price index (CPI) for November is expected to have increased 6.8% compared to the same month last year, overtaking October’s 6.2% rise, which was the fastest increase in 31 years.
“Information on energy in November does not reflect today’s reality and it does not reflect the expected price declines in the weeks and months ahead, such as in the auto market,” Biden said in a long statement ahead of the CPI data.
Republicans have used the issue to criticize Biden’s massive spending agenda, and it has weighed on the president’s approval rating in recent months.
The claim is not fully supported, given that inflation is global, and annual inflation rates for many goods routinely purchased by American households — including food — were already at their highest levels in the decade before Biden entered the White House earlier this year.
Biden’s top economic adviser Brian Deese appears at a regular White House briefing to deliver the same message.
He touted a drop in the unemployment rate to 1969 levels, a rise in real household incomes and what he called “encouraging signs” in labor force participation, while warning against over-interpreting Friday’s data.
“The data is by definition looking backwards and therefore won’t capture some of the recent price moves, particularly in the energy area,” Deese said, citing a nine-cent drop in gasoline prices nationwide.
The United States have had gas prices at a 20-year average low, said Deese. A “very dramatic drop” in natural gas prices would also help ahead of winter, he said.
He also noted that certain events are currently pushing consumer prices lower like the wholesale used car price drops and the shipping costs and commodities (like wheat and pork) being lower.
November’s core CPI, which excludes volatile food and energy components, is expected to rise to an annualized 4.9% from a 4.6% gain the previous month, a Reuters poll showed.
Federal Reserve Chair Jerome Powell said last week the US central bank should be prepared to respond to the possibility that inflation may not recede in the second half of next year as most forecasters currently expect.
Deese declined to predict whether price increases could continue into next year, but said most independent forecasters expect inflation to moderate “significantly” over 2022.
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